After six months battling to no avail with BT Wrap portfolio administration for answers to what he calls “basic” questions, a fund manager has decided to go to the media.
Kieran Kelly of Sirius Funds Management has spoken out about his frustration and fears about the security of BT Wrap, which he has been using for ten years.
He told Wealth Professional
that while the wrap as a service works well for his business, he expects the administrative side to lift its game and get out of the “1970s”.
For the past six months he’s tried to get hold of audited client statements, confirmation of balances and an assurance that client holdings aren’t loaned out for short selling, but the wrap has either refused or been unable to provide answers.
This is “woefully inadequate”, Kelly said.
“In a nutshell there are so many questions I’ve asked and they haven’t been answered, and they are standard commercial questions that should have been answered overnight,” he said. “This is 1970s stuff where someone is trying to find out information and all they get is a big load of nothing.”
A stalwart in the business, Kelly has survived four share market booms and busts and said there’s no point in asking these questions of service providers after a crash occurs and it’s too late to fix the damages.
Of major concern to him about the Westpac-owned BT Wrap, is the discovery that it sub-contracts share transactions to a bank competitor – Commonwealth Bank subsidiary Core Equity services.
This is not advertised anywhere Kelly said, and it was only through his own questioning that BT Wrap divulged the information.
More shockingly, it has now yet to respond to any of Kelly’s questions surrounding the security of such an arrangement.
He wants to know what would happen if there was a settlement failure by Core Equity services; if the agreement with Core prevents stock lending, and he wants an assurance that Core is part of the ASX Fidelity Fund, which ensures that if a broker makes a mistake the client can claim back money against the fund.
“I want to know if there is a major stuff up where my clients sit in all of this,” he said. “BT Wrap has at least $2 to $3 billion of superannuation money sitting in there and it’s got to do a lot better than this.”
At the very least Kelly wants BT Wrap to advise its trustees the third party arrangement, but ideally he’d like to see the brokering and execution services brought in-house.